As I mentioned, I am taking Financial Peace University at a local church. My aunt turned me on to Dave Ramsey back in 2008. In four years I paid off $17,000 in credit card debt. It took a lot of hard work, cashing out some retirement (which Dave wouldn’t approve LOL), using tax returns, second jobs and denying returning to my beloved Europe…but it’s been paid off, dammit!
I want to spend time on every week of the class. It holds me accountable to what I have been learning and helps me process my relationship with money. I have been a spender for a lot of years but as I hit full-blown middle age I so want to go back to Europe, to be able to afford a house and to experience true financial freedom.
Week 1 of FPU covers Baby Step #1–have $1,000 in cash in an emergency fund. I can happily say I have done that; I put a grand in the bank months ago. Why $1,000? It’s called Murphy’s Law. When you think about it, anything that can go wrong usually does. Glasses break, cars need repairs, bills pop up…with $1,000 in the bank you have the cushion you need so that you can focus on the next step–paying off all your debts except the mortgage.
It wasn’t hard to get $1,000 because I had cleaned out my retirement from my last job and slapped it into my bank account. That gives me the peace of mind to continue scrimping, saving and throwing money at my debt so I shouldn’t have any worries. It’s also nice to have that because my eventual goal is to have $10,000 rainy day fund (3-6 months living expenses in case I lose my job) and I am already well on my way to getting it started up!
Now I do differ slightly with Dave on one point. He says to put it in a good money market account. But my bank requires $2,500 to open even the most basic money market. So for now it is in my savings account earning a teensy amount of interest until I do have the dough to invest. Oh, well. If that’s my biggest problem, I think I am doing all right!
I will keep sharing what I learn from this round of FPU as the weeks progress. I look forward to this process and growing in financial wisdom. In the meantime, I am better than I deserve to be 🙂